Okay, this can be a little tricky. All authors (and agents, for that matter) love getting big advances. I mean, who doesn’t want big money? The perception is often that the size of publisher’s advance is an indication of the level of a publisher’s commitment to your book. Here’s what you need to know about advances:
An advance is not free money a publisher hands out for you to spend however or wherever you like. The best way to think about an advance is as a loan the publishing is giving you to cover any costs you might accrue during the writing of your book. I once had an author tell me that he really needed more money because his mother-in-law was about to default on her mortgage and the advance money was going to help her keep her house. Bad idea.
Advances are supposed to be proportionate to estimated sales of your book within its first eighteen months of publication. For example, if a publisher offers $45,000, that means they expect your book to earn out at least $45,000 in sales during that initial sales period. One little known fact is that if a book doesn’t earn out its full advance, or the manuscript the author submits is not the manuscript the book was contracted to be, the publisher reserves the right to ask for any and all unearned portions of the advance back. Authors frequently dispute this but it is in the contract. Publishers rarely act on this, but some have and as an author, you need to be prepared for this possibility. What’s the moral here? READ YOUR CONTRACT. Get to know it line-by-line. If there’s anything you don’t understand, make sure your agent or a trusted attorney who is knowledgeable in publishing law, goes over it with you.
Think about it though. If you get a $100,000 advance, that means you have to sell $100,000 worth of books. That’s a lot of books…and potentially a lot of stress. Remember also that you won’t even start to earn royalties on your book until that advance is earned out in full. This means that a lot of books never earn royalties. It can be awfully discouraging.
The sad fact—though from a business perspective it makes sense—is that publishers aren’t paying out the big bucks for new books like they used to. The publishing industry was hit hard by the recession and is still struggling. As much as we might like to think that publishers publish for their sheer love of books, the cold hard fact is that publishing is a business, like any other. Publishers are in to make money. It is all about the bottom-line. And it has to be. If you think about all the money paid out to authors for books that never come close to earning out their advances, you’re talking about an industry that consistently operates at a loss. It’s not a good business model by anyone’s perspective.
When considering offers, try to look beyond the advance. Pay attention to the royalty structure being offered, but more so, look at how creatively and proactively your publisher approaches the marketing and publicity for your book. I’ve sometimes advised authors to go with the publisher that may pay less up front but is really committed to marketing the heck out of your book. If the book sells, the money will follow.